The price touched fair value on 10/21/2026: +16.56% from the DD reference price of £12.92. DD not tracked on social: the outcome is measured from the report reference price, not from a publication date. Thesis played out — this report is a historical document, no longer maintained.
Cohort’s record order book and stronger margins support profitable growth. FY2026 free cash flow turned negative as naval contracts absorbed working capital. The independently derived base fair value is 1506p, +16.6% versus the 20 October close; cash recovery is the decisive test.
Methodology. Peer median → measured adjustments → FY2027 estimated EBITDA → enterprise-to-equity bridge. Cash and debt enter only the equity bridge; they do not alter the EV multiple. The 25/50/25 scenario weights reflect a profitable, contracted business with material cash-conversion risk. ⚠️ Not investment advice.
| Component | Assumption | GBP/share |
|---|---|---|
| Enterprise operating value | FY2027 adjusted operating profit consensus £41.7m + FY2026 D&A £7.507m (analyst EBITDA estimate £49.207m) × 14.4402x / 47.204346m issued shares | +15.05 |
| Cash | £49.581m at 2026-04-30 / 47.204346m shares | +1.05 |
| Bank borrowings | £47.364m at 2026-04-30 / 47.204346m shares | -1.00 |
| Non-controlling interests | £1.818m book-value proxy / 47.204346m shares | -0.04 |
| Unquantified claims / options | £0m included; no reliable current cash claim estimate | +0.00 |
| Base fair value | (£710.559m + £49.581m − £47.364m − £1.818m) / 47.204346m shares | 15.06 |
For conservative valuation, 47.204m issued shares are used rather than the vendor’s ~45.99m economic shares. At 1,292p, issued-share capitalization is ~£609.9m; the vendor’s ~£594m reflects its lower share denominator. The price is inside the 884p–1,530p 52-week range. No ongoing buyback is assumed.
| Item (£m unless stated) | FY2024 | FY2025 | FY2026 | FY2027 consensus |
|---|---|---|---|---|
| Revenue | 202.5 | 270.0 | 306.4 | 325.3 |
| Adjusted operating profit | 21.1 | 27.5 | 36.3 | 41.7 |
| Adjusted operating margin | 10.4% | 10.2% | 11.8% | 12.8% implied |
| IFRS profit before tax | 19.8 | 25.6 | 32.6 | N/D |
| Operating cash flow | N/D | 51.2 | 11.3 | N/D |
| Capital purchases | N/D | 13.2 | 17.6 | N/D |
| Free cash flow after capex | 16.4 | 38.0 | −6.3 | N/D |
| Adjusted EPS (p) | N/D | 54.4 | 61.9 | 66.9 |
| Net funds | N/D | 5.3 | 2.2 | 5.0 |
FY2027 values are company-published analyst consensus, dated 2026-07-24, not issuer guidance. FY2024 FCF is a vendor historical figure; FY2025–26 FCF is cash from operations less cash property purchases. Different definitions may vary. Statutory ROE is about 13.9%: £23.903m profit attributable to owners divided by £172.512m average parent equity; acquisition goodwill weighs on this measure.
| Metric (£m unless stated) | H1 FY2025 | H1 FY2026 | FY2025 | FY2026 |
|---|---|---|---|---|
| Revenue | 118.2 | 128.8 | 270.0 | 306.4 |
| Adjusted operating profit | 10.1 | 9.7 | 27.5 | 36.3 |
| Adjusted operating margin | 8.5% | 7.5% | 10.2% | 11.8% |
| Net debt / (funds) | N/D | 32.5 debt | 5.3 funds | 2.2 funds |
The financial chart labels free cash flow explicitly. FY2026 cash £49.6m less bank borrowings £47.4m gives £2.2m net funds, excluding lease liabilities. The £175m facility provides liquidity but is not cash or enterprise equity value.
Business model — defence technology
Communications & Intelligence £158.9m FY2026 revenue Growing £32.4m segment adjusted operating profit, up from £21.1m; EM Solutions and MASS led growth. £229.5m order book. Sensors & Effectors £147.5m FY2026 revenue Execution test £10.5m segment profit, down from £12.7m; Italian sonar and Chess margins remain constraints. £389.3m order book. Central costs −£6.7m FY2026 Corporate Segment profits £32.4m + £10.5m less £6.7m central costs reconcile to £36.3m group adjusted operating profit.
FY2027 division-level sales and margins are not disclosed in the issuer consensus. No fabricated quarterly figures or divisional forecasts are used.
Legal, regulatory and risk analysis
SWOT analysis
- +£700m mid-September order book with multi-year defence demand
- +FY2026 adjusted operating margin improved 160 basis points
- +C&I grew revenue 27% and profit 54% year over year
- +Positive net funds and renewed banking facility
- −FY2026 free cash flow after capex was negative £6.3m
- −Sensors and Effectors profit declined despite stable revenue
- −Long programme milestones make cash flow volatile
- −Small AIM float and limited trading liquidity
- →Polish Orka sonar contract worth €140.7m
- →Working-capital reversal could restore cash conversion
- →Chess margin recovery in FY2027
- →Expansion of NATO and Australian naval programmes
- !Italian sonar acceptance or cost slippage
- !Defence procurement and export licence delays
- !Acquisition and share issuance dilution
- !Peer multiple compression if cash recovery fails
Summary by assessment area
Sources: results · consensus · agm · price · shares · h1 · qq · chg · avon · directors · short · financials · Market data — last verified close 2026-10-20: CHRT ~1,292p, market cap ~£609.9m on 47.204346m issued shares, 52W range 884p–1,530p, 47.204346m shares outstanding/issued. Short interest: N/D; reliable aggregate not verified. Price × issued shares = £609.9m. Vendor cap ~£594m uses ~45.99m shares and differs by ~2.6%. This document is for informational purposes only and does not constitute financial or investment advice.